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Growing ranks of long-term jobless face tough odds

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JEANNINE AVERSA
June 6, 2010
— If you lose your job these days, it's worth scrambling to find a new one fast.

After six months of unemployment, your chances of landing work dwindle.


The proportion of people jobless for six months or more has accelerated in the past year and now makes up 46 percent of the unemployed. That's the highest percentage on records dating to 1948. By late summer or early fall, they are expected to make up half of all jobless Americans.


Economists say those out of work for six months or more risk becoming less and less employable. Their skills can erode, their confidence falter, their contacts dry up. Their growing ranks also will keep pressure on Congress to keep extending jobless benefits, which now run for up to 99 weeks.


Overall, the economy has created a net 982,000 jobs this year. But for Jeff Martinez and the record 6.76 million others who have struck out for six months or more, their struggles are getting worse, not better.


Martinez, 40, a salesman in Washington, D.C., says he's logged more than 200 interviews in the past three years. Decked out in a dark navy suit and Burberry tie, Martinez projects drive and a zest for deal-making. And yet the most urgent deal of his career finding a job eludes him.


"You have days where you feel motivated and hopeful and optimistic," he says. "Then there are other days, you really lose the faith and think, 'I'm never going to get another job. Ever.'"


What's causing the rising ranks of the long-term jobless to exceed the pace of other recessions?


Mainly, it's the depth and duration of the job-slashing this time. Since the recession began in December 2007 through May this year, a net 7.4 million jobs have vanished. The unemployment rate has surged nearly 5 percentage points: From 5 percent in December 2007 to 9.7 percent in May.


By contrast, in the last severe recession, the rate rose less sharply over a shorter period: From 7.2 percent in July 1981 to 10.8 percent at the end of 1982.


Lawrence Mishel, president of the Economic Policy Institute, points to the "sheer scale of the falloff in demand for workers" this time. It's left more people out of work for longer stretches. And it's intensified competition for each opening.


"It's a cruel game of musical chairs," Mishel says.


To lower the unemployment rate from the current 9.7 percent to a more normal 6 percent would require roughly a net 15 million new jobs by the end of 2016, estimates Brian Bethune, chief U.S. financial economist at IHS Global Insight.


Few think that's likely.


One factor behind the growing proportion of the long-term unemployed is the erosion of their workplace skills or employers' perception of it. It's hard to find work in a tight job market when your skills are seen as stale.


For some occupations in particular, such as computer technicians or accountants, people jobless for many months can lose pace with technological changes or federal rules.


Among those who fear losing their edge is Stephan Azor, 30. He's looking for information technology work, perhaps overseeing a company's computer system. He was laid off eight months ago as a system administrator for a defense contractor.


"Technology changes every six months, so there are things I have to look up and learn," says Azor, who lives in Washington.


Other reasons for the growing proportion of the long-term unemployed:


Jobs wiped out by the Great Recession that aren't coming back. In industries like home construction, manufacturing and retail, fewer workers will be needed even after the economy has fully recovered. One reason is higher productivity: Companies have managed to produce the same level of goods or services with fewer workers. Economist Marisa DiNatale of Moody's Economy.com notes that people out of work in those industries may lack the skills for other jobs that are becoming available.


The breadth of the recession, which struck every area of the country, makes it harder for job hunters to move to another region in expectation of finding a job. Complicating the matter, the housing bust made it difficult for people to sell their homes and move elsewhere to take a job, economists say.


A study by the National Employment Law Project found that older workers those 45 and up make up the largest slice of the long-term unemployed. African-Americans make up 20.8 percent. And men account for six out of 10.


Martinez was living in Los Angeles and pulling in $200,000 a year from a media sales job. Three years ago, he lost it.


Burning through cash, Martinez had to move back home with his parents in Sterling, Va., outside Washington. He landed another media sales job in the area in 2008, at the height of the financial crisis. But four weeks later, he was laid off.


By his count, Martinez has sent out 2,500 resumes in the past year. He's researched would-be employers and written personalized cover letters. He hit a dry spell at the start of this year. Since then, Martinez says the job climate seems to have improved. He's interviewing again. But it's emotionally draining.


"It's tough not to have an interview, and it's just as tough to go on five or six or seven interviews and not get hired," he says.


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AP Business Writer Christopher Leonard in St. Louis contributed to this report.



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